Audit risk and rent extraction: Evidence from a randomized evaluation in Brazil

Stephan Litschig and Yves Zamboni

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: We report results from a randomized policy experiment designed to test whether increased audit risk deters rent extraction in local public procurement and service delivery in Brazil. Our estimates suggest that temporarily increasing annual audit risk by about 20 percentage points reduced the proportion of irregular local procurement processes by about 17 percentage points. This reduction was driven entirely by irregularities involving mismanagement or corruption. In contrast, we find no evidence that increased audit risk affected the quality of publicly provided preventive and primary health care services -measured based on user satisfaction surveys- or compliance with national regulations of the conditional cash transfer program "Bolsa Família".

Keywords: Corruption; Rents; Local Governments; Law Enforcement (search for similar items in EconPapers)
JEL-codes: D73 D78 H41 H83 K42 (search for similar items in EconPapers)
Date: 2011-04, Revised 2013-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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Related works:
Working Paper: Audit Risk and Rent Extraction: Evidence from a Randomized Evaluation in Brazil (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:1270

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